Stunning images capture beauty of gold

Gold has been widely used throughout the world as a vehicle for monetary exchange, either by issuance and recognition of gold coins or other bare metal quantities, or through gold-convertible paper instruments by establishing gold standards in which the total value of issued money is represented in a store of gold reserves.

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Image: An employee displays gold teeth at a shop that purchases gold in the Ginza district of Tokyo.Photographs: Toru Hanai/Reuters

Stunning images capture beauty of gold

However, production has not grown in relation to the world's economies. Today, gold mining output is declining.

With the sharp growth of economies in the 20th century, and increasing foreign exchange, the world's gold reserves and their trading market have become a small fraction of all markets and fixed exchange rates of currencies to gold were no longer sustained.

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Image: Jewellery is displayed at a shop that buys gold in the Ginza district of Tokyo.Photographs: Toru Hanai/Reuters

Stunning images capture beauty of gold

Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or harbor against economic, political. or social fiat currency crises (including investment market declines, burgeoning national debt, currency failure, inflation, war and social unrest).

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Image: An employee arranges gold jewellery in the counter as her arm is reflected in the mirror at a gold shop in Wuhan, Hubei province, China.Photographs: Stringer/Reuters

Stunning images capture beauty of gold

The history of the gold standard, the role of gold reserves in central banking, gold's low correlation with other commodity prices, and its pricing in relation to fiat currencies during the late-2000s financial crisis, suggest that gold behaves more like a currency than a commodity.

Stunning images capture beauty of gold

Since 1919 the most common benchmark for the price of gold has been the London gold fixing, a twice-daily telephone meeting of representatives from five bullion-trading firms of the London bullion market.

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Image: A pre-Columbian gold mask is seen at the Gold Museum in Bogota, Columbia.Photographs: Fredy Builes/Reuters

Stunning images capture beauty of gold

Most of the gold ever mined still exists in accessible form, such as bullion and mass-produced jewellery, with little value over its fine weight - and is thus potentially able to come back onto the gold market for the right price.

Stunning images capture beauty of gold

Given the huge quantity of gold stored above-ground compared to the annual production, the price of gold is mainly affected by changes in sentiment (demand), rather than changes in annual production (supply).

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Image: A shopkeeper counts Thai baht banknotes as he buys gold from a customer in Bangkok's Chinatown.Photographs: Sukree Sukplang/Reuters

Stunning images capture beauty of gold

It is generally accepted that interest rates are closely related to the price of gold. As interest rates rise the general tendency is for the gold price, which earns no interest, to fall, and as rates dip, for gold price to rise.

Stunning images capture beauty of gold

As a result, gold price can be closely correlated to central banks via the monetary policy decisions made by them related to interest rates.

For example if market signals indicate the possibility of prolonged inflation, central banks may decide to enact policies such as a hike in interest rates that could affect the price of gold in order to quell the inflation.

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Image: The Golden Victoria statue atop of the Siegessaeule (victory column) is pictured on a snowy day in Berlin.Photographs: Hannibal Hanschke/Reuters

Stunning images capture beauty of gold

The most traditional way of investing in gold is by buying bullion gold bars. In some countries, like Canada, Argentina, Austria, Liechtenstein and Switzerland, these can easily be bought or sold at the major banks.

Image: A salesman helps a customer to try on a jewellery set at a shop in a shopping district in BeirutPhotographs: Cynthia Karam/Reuters